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Friday, 3 April 2009

The Voice - Dear Consumer's Voice

Dear Consumer's Voice

We saw an advert in the Advertiser last year for a plot in Lecheng in Palapye.

We got interested in the plot and arranged to go and see it. The advertised price was P100,000. We asked the Estate Agent if the price could be lowered and he said the owner of the plot said she could only lower it to P80,000. We agreed and paid the P80,000 to the estate agent.

A few days later, we learned from the owner of the plot that she was selling the plot for P40,000 and the estate agent had already given her the money. We then called the estate agent to enquire about the price and why he doubled the price of the plot. He said the rest of the money was his commission but we still found it unfair for an estate agent to charge 100% or even more as commission. Is this allowed?

Please advise?

I don’t think there’s any rule anywhere that limits the commission that an Estate Agent can charge. I also don’t think there should be a rule which dictates such things. Surely it’s better for the market itself to decide these things? The most effective way to get prices as low as possible is for there to be free and fair competition between Estate Agents. The Agents that want to sell things as quickly as possible will be the ones that offer the best prices.

Nevertheless charging 100% commission is outrageous. I’ve never heard of a commission that high.

The bad news is that there is probably nothing you can do directly to get your money back. However it needn’t actually stop here.

We phoned the company in question, a company called Mobile Agencies (Pty) Ltd, and asked them if they could justify their enormous commission.

They couldn’t, they didn’t even really try to justify it. They claimed that they weren’t an Estate Agent, they were just a “consultant” acting on behalf of the owner of the property.

Of course, what they call themselves is not relevant. The Real Estate Professionals Act states that someone is an estate agent if they are “engaged in the purchase, sale, letting or hiring of real estate as agent or broker for another person”. Sounds fairly simple, doesn’t it?

The Act also states that anyone who is an estate agent who practices while not registered with the Real Estate Institute of Botswana is guilty of an offence. However you might ask how serious this offence can be?

Well, the punishment can be “a fine not exceeding P50,000 or to imprisonment for a term not exceeding three years, or to both”. Pretty serious.

So we asked them if they were registered and what do you think they said? No, they’re not registered. The guy we spoke to accepted that it was required to register, yes, he understood that but he hadn’t bothered to obey the law. We explained that we now felt obliged to contact the Real Estate Institute and he said he’d get back to us. He did actually, he called us back later and told us that we can speak to his lawyers.

Here we go.

Dear Mobile Agencies (Pty) Ltd’s lawyers.

Your clients are acting as estate agents as defined by the Real Estate Professionals Act but have neglected to register with the Real Estate Institute as required by the same Act.

They are therefore very naughty. We suggest that you explain this to them before they get a spanking.

Lots of love

Consumer Watchdog

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Dealing with Professionals

Sooner or later most of us have to deal with members of “the professions”. By “professions” I mean those jobs where people have to be registered with a professional body, jobs like like doctors, lawyers, accountants and, as in this week’s case, even estate agents.

Obviously as consumers we deserve decent service from everyone who delivers goods or services, of course, it doesn’t matter whether they’re selling us cellphones or saxophones. However there are certain professions where things are much more serious. Professions that, if things go wrong, if standards aren’t met, we suffer.

If a doctor prescribes the wrong medicine, fails to make an obvious diagnosis or treats you while intoxicated he can be dragged before a professional board who will take action against him. Their actions are so important that if they are wrong you can potentially die.

Similarly with lawyers and accountants. Any mistakes they make can cause you enormous financial harm, that’s why they are forced by their own professions to maintain certain standards.

This is also why Government, following pressure from the industry itself, passed the Real Estate Professionals Act which regulates a variety of property-related activities, but most importantly to you and me, estate agents.

Anyone who sells properties on behalf of another person now has to register with the Real Estate institute. It’s not optional, not something they can do if they feel like, not something they can’t afford to do. They have no choice, it’s the law.

If you ever want to buy or sell property make sure you ask every estate agent you meet if they are registered with the Institute. If they’re not, make sure that you walk away.

In general, whenever you deal with anyone from one of the regulated professions remember that there are professional bodies who can help if things go wrong. Chances are that the professional won’t let things get to that stage. Their career and livelihoods depends on staying on the right side of these bodies.

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We support consumers in Botswana, educating them on their rights, helping them to fix problems and exposing scams. Email us at watchdog@bes.bw, or call on +267 3904582 or fax on +267 3911763. It's all free, you've nothing to lose!